NOC bucks fuel hike trend, but fails to win hearts

Contrary to popular perception, that what goes up in Nepal never comes down, Nepal Oil Corporation (NOC) — the state monopoly — has bucked the trend.
For the first time in its 38-year history, NOC has slashed the price of petrol by Rs 5 per litre.
Petrol costs Rs 95.50 per litre in the Valley as per the rate of Nepal Petroleum Dealers' Association (NPDA), which has overruled NOC, albeit marginally.
However, experts feel that there is a dire need of proper mechanism on price adjustment.
Dr Shankar Sharma, former vice-chairman, National Planning Commission (NPC), panned the ad-hoc decision.
"It was a great opportunity to work out the price mechanism. But the decision was taken in haste. No proper homework went into it. Such decision won't bring sustainable solution," he said. Though, NOC has said that it would revise the price every 15 days — as and when it gets the new price list from its sole supplier Indian Oil Corporation (IOC) — it is yet to work out on the price mechanism that will be in sync with the international price.
International price is key and then comes the tax. "The need of the hour is to work out pricing formula. If there is transparency, consumers will not feel cheated as and when there is revision in prices. Time is ripe for restructuring of NOC management as well,"
he added. Dr Sharma knows a thing or two about the working pattern of the state oil monopoly. He had headed a committee, which looked into restructuring of NOC and its management.
NOC had raised the petrol price to Rs 100 per litre when the global fuel price was at its high of $145 per barrel. But there has been a drastic fall in crude price since then. At present, it is hovering around $70 per barrel (159 litres).
"The international price has come down to half and NOC has reduced the price of petrol by Rs 5 per litre," said Jyoti Baniya, general secretary, Consumers' Forum. He accused the government body of deceiving consumers. "It's a crime. To begin with, it's a delayed-decision. Second, the cut should have been in tune with global rates. NOC has forced consumers to pay its loan and tax as well," alleged Baniya.
NOC refused to take the global cue had it not for the mounting pressure from consumers, Constituent Assembly members and students unions.
According to NOC data, it makes a profit of around Rs 16 per litre in petrol, thanks to the dip in OPEC crude prices. But it reduced only Rs 5 in a litre.
NOC has now promised to receive price after it receives a list from the IOC on every 2nd and 16th of the English month.
The state fuel major has also reduced the price of Air Turbine Fuel (ATF) by Rs 4,100 per kilolitre, from $1,500 to $1,400 per kilolitre. But on what basis, noone knows.